Weetabix UK buys Deeside Cereals from Wholebake Limited
UK – The Weetabix Food Company, UK breakfast-cereal business owned by Post Holdings has announced that on Friday 1st December 2023, they completed a deal to acquire Deeside Cereals from Wholebake Limited.
The acquisition will strengthen the Weetabix Food Company, bringing new capabilities and additional manufacturing capacity.
According to the statement, Deeside Cereals will continue to operate as a standalone business and the Weetabix Food Company is not planning to make any changes to the site or workforce in the foreseeable future.
US-headquartered Post Holdings acquired Weetabix in 2017 from Chinese state-backed majority shareholder Bright Food Group and an investment fund advised by Baring Private Equity Asia.
Weetabix produces cereal under its own brand name and also the likes of Alpen, Ready Brek and Crunchy Bran. The cereal maker struck another deal last year for UFit, the protein shakes business then-owned by Lacka Foods.
In Post Holdings financial year to 30 September, Weetabix generated sales equivalent to $512.1m, an increase of 7.3%.
Segment profit was $73.9m, a decrease of 32.5%, while adjusted EBITDA was
$110.2m, down 24.9%, Post Holdings reported in November.
Discussing those results, Post Holdings’ CEO Jeff Zadok, who is standing in while permanent boss Rob Vitale is on medical leave, outlined the challenges Weetabix is facing in the UK as a more premium-centred brand.
“If you track that market, cereal has become slightly greater than 50% private label,” Zadok said.
“What we need to do to get it back to closer to where we were pre-pandemic is we believe we need to simplify the business. We need to have a renewed focus on cost reduction and we need to continue investing in the brand so that we maintain the premium price points that enable us to generate the margins from that business.”
On its side, Snack maker Wholebake has sold its own-label cereal business to Weetabix in a drive to simplify operations as part of a turnaround effort.
It follows three years of widening losses as the group battled the pandemic, Brexit-driven labour shortages and significant input cost inflation.
Wholebake acquired Deeside, which accounted for about 25% of the group’s £46m revenues, in 2021 shortly after under an MBO backed by Elysian Capital.
The 2021 deal helped maintain rapid growth at the company but added ‘considerable complexity’, according to Peter Tichbon, who was appointed as Wholebake CEO by Elysian this summer to lead a turnaround.
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